Okonjo-Iweala: NLNG is an asset to Nigeria

The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, was at the Nigeria Liquefied Natural Gas (NLNG) Plant in Finima, Bonny Island, Rivers State. She described the NLNG as an asset to Nigeria, writes OLUKOREDE YISHAU.

The company has made $25 billion from a $2.6 billion investment; it has six-train plant worth over $15 billion; it owns 24 ships and six ships are underway from Samsung and Hyundai dockyards; and it has initiated a finance scheme, which will enable contractors and vendors to access $1 billion credit from Access Bank, First Bank, Standard Chartered Bank, United Bank of Africa and Zenith Bank.

This will enable NLNG registered contractors and vendors to speed up delivery of goods and services to the country’s oil and gas industry.

The scheme, which was part of the Nigerian Oil and Gas Industry Content Development Act of 2010.

But, these statistics do not tell all the story of the Nigeria Liquefied Natural Gas (NLNG) Limited. There are challenges, which must be surmounted for the company’s statistics to remain good.

The Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, was at the NLNG Plant on Bonny Island, Rivers State on November 15, 2013. She described the NLNG as asset to Nigeria, a shining example of a successful company and a beacon of hope for a better Nigeria.

The minister alluded to the fact that NLNG’s financial book was an enviable balance sheet and that told success stories.

“I came after looking at your books and saw that you have been commercially viable and successful. The Nigeria LNG is an asset to the country,” she said, adding that not much was in the public domain in spite of the very impressive performance of the company.

Dr Okonjo-Iweala described NLNG as the most successful Nigerian company with 49 per cent government ownership, which she described as a distinguishing feature among companies in the public and private sector.

The NLNG is an incorporated joint venture owned by four shareholders, namely, the Federal Government, represented by the Nigerian National Petroleum Corporation (NNPC)— 49 per cent, Shell Gas BV (SGBV)— 25.6 per cent, Total LNG Nigeria Limited—15 per cent and Eni International—10.4 per cent.

The minister, however, said the company must rise above the looming global LNG industry storm, which may see NLNG lose its market share if it does not expand. She said the company should consolidate its feed gas supply and ensure it secures long-term offshore contracts for its proposed Train Seven, adding that with the United States of America joining the league of oil and gas exporters, it was imperative for the NLNG to explore other major importers.

The Train seven is expected to boost the country’s position in the global energy market, monetise more gas that would have been flared and earn more revenue for the economy.

With the end of the tax holiday for NLNG, the country is reaping even more from its performance. According to the Managing Director and Chief Executive Office of NLNG, Mr. Babs Omotowa, over $1 billion would be paid as Company Income Tax (CIT) to the Federal Government next year. Only few companies in the country can match this.

He said with the commencement of operations in 1999, the company had been able to reduce gas flaring from 65 per cent to about 20 per cent. He pointed out that more gas flares would be cut down and more money made if government gives a nod to the planned expansion of the plant.

The NLNG boss said the company was positioned for the anticipated expansion, pointing out that the six-train plant currently produces about 22 Metric Tonnes Per Annum (mtpa) of liquefied natural gas (LNG) for export and 5 MTPA of natural gas liquids (NGLS).

The company also supplies the Nigerian domestic market with 250,000 tonnes of LPG otherwise known as cooking gas.

“NLNG Train Seven project will raise the liquefaction capacity of the Plant to 30mtpa, consolidating Nigeria’s position as one of the largest producers and exporters of LNG and sustained revenue for the economy,” he said.

Omotowa said an aggressive and sustained expansion of the facility is the only answer to America’s shale gas development and other emerging natural gas producing countries which are serious threats to NLNG’s current success status.

With the 6-train plant complex, NLNG has been able to make the environment cleaner, contribute to the nation’s GDP, empower Nigerians by giving them opportunities to manage a world class organisation whilst building capacity, create employment and entrepreneurship through unparalleled support for Nigerian Content and wake up the maritime industry from its near comatose state.

Omotowa said it has awarded contracts to two Korean companies, Samsung Corporation and Hyundai Heavy Industry to build six ships where the company’s local content drive had received practical expression. He revealed that the terms of the contract were for them to source some of the materials from Nigeria.

“We are constructing six brand new ships in Korea and the total cost of construction is $1.3 billion. We are training Nigerians in the process. We will train over 600 Nigerians and 100 of them will be given advanced training too. 30 of them will actually go to Korea to learn more about ship-building so that they will participate in the construction of ships.

“We are hoping to develop capacity so that in future, when we will have dry docks and other ship-building facility in Nigeria, there will be Nigerians to do the work. They are being trained in ship-building. There are dry docks being built in Nigeria. There are shipyards being built in Nigeria. When they come back, they will work in the ship-building industry and they will be able to build their skills,” he said.

The six new ships will increase NLNG fleet to 30 ships. There are spiraling effects to this. This will mean more need for seafarers and ship officers to man the ships.

Currently, the NLNG through its second subsidiary, NLNG Ship Manning Limited (NSML), is the biggest employer of Nigerian seafarers on board its 13 LNG carrier ships.

NLNG brings the benefits closer to households with the supply of over 70 percent of Liquefied Petroleum Gas (LPG), popularly known as cooking gas. Omotowa urged the Federal Government to stem the growing wave of smuggled low quality cooking gas from Niger Republic.

”LPG is a very clean gas which is healthy for both the environment and for the people. As a country, we could use a lot more LPG than we do. Unfortunately, in Nigeria, because kerosene is being subsidised, the price of LPG has not been attractive to people. The problem is that the use of kerosene is an alternative to wood; there has been issues about the environment and health issue. So, the removal of subsidy will help cooking gas to be used, which will be cheaper and more environmentally-friendly,” he added.

Omotowa described Dr. Okonjo-Iweala’s visit as inspiring and assured the minister that Nigeria would get more value from its investment in NLNG in the coming years.

He said: “The organisation is recognised in the world for its performance. We will continue to do that. We are growing as well. We are building six new ships and we are also working hard on our growth project. So we are looking to grow the organisation, grow the plant and continue to deliver more value for Nigeria. We are keen to bring more value to Nigeria.”

Nigeria LNG Limited was incorporated as a limited liability company on May 17, 1989, to produce LNG and natural gas liquids (NGL) for export. The plant was built by TSKJ consortium. Other participants of the consortium were Snamprogetti, Technip and JGC Corporation. The first train came into operation in 1999.

It operates six liquefaction units (LNG trains) producing 22 million metric tonnes of LNG per year (mmtpa). Trains 1, 2 and 3 have production capacities of 3.2 mmtpa, whilst trains 4, 5 and 6 have capacities of 4.1 mmtpa each. The final investment decision on the train 7 has not yet been made.

The company has a wholly-owned subsidiary set up in 1989, Bonny Gas Transport (BGT) Limited, which provides shipping services for NLNG. BGT was set up in Bermuda with an ordinary equity holding from NLNG Limited and preferential equity holding from the sponsors, NLNG’s shareholders. Another wholly owned subsidiary of NLNG Limited is Nigeria LNG Ship Manning Limited (NSML), which was set up in 2008 to give dedicated attention to providing, developing and managing high calibre personnel for NLNG’s maritime business.

2 thoughts on “Okonjo-Iweala: NLNG is an asset to Nigeria”

Of what values are these natural gasses {NLNG} to this country, if we can not effectively use these resources to generate electricity; “FUNCTIONAL EDUCATED ILLITERATES” I always call them, because the paper tiger education these jungle bonga_bonga technocrats inherited will amount to vanity, because only the “OYINBOS” value the importance of these natural gasses; we Nigerians just want to sell, sell, and sell, and CHOP and QUENCH the proceeds.

Please do not dwell on negatives. I am very proud of these “young Nigerians” with foresight. We all ned to be proud of our own. As a retired engineer and educator myself in US, I sincerely raise my cap for them.